July 5, 2011

 

Aabar purchases Banvit Bandirma Vitaminli Yem Sanayii's shares

 

 

Aabar Investments of Abu Dhabi signed a preliminary agreement to purchase 16.3 million shares of the Turkish poultry producer Banvit Bandirma Vitaminli Yem Sanayii yesterday (Jul 4).

 

The Istanbul-listed company said its shareholder Valid Faruk Ebubekir was selling the shares to Aabar.

 

The shares are to be sold at TRY4.80 (US$2.97) each after certain conditions in the agreement are met, Banvit said on Friday (Jul 1).

 

For the company, Turkey's largest poultry producer, Aabar is an important investor.

 

In May, Aabar, which is owned by the International Petroleum Investment Company, became the largest "cornerstone investor" in the commodity trading giant Glencore.

 

Large investors such as Aabar are given priority over small investors in initial public offerings but usually have to agree to buy shares at the top of the price range.

 

Aabar invested US$1 billion in Glencore's flotation. Having a big player such as Aabar behind it bodes well for the Turkish company. On the Istanbul exchange, shares in Banvit climbed 4.3% yesterday to TRY4.59 (US$2.84), the highest level in almost a month.

 

An analyst said the sale of the shares had been a lengthy process, taking several months and dragging Banvit's stock price down.

 

"Now we have confirmation and it has been complete, it is lifting pressure off the stock price," he said.

 

He has a neutral rating on the stock and a target price of TRY6.30 (US$3.90) a share. The valuation of the stake sale was close to his forecast of TRY4.50 (US$2.78) per share, added the analyst.

 

Turkey's economic and political environment is encouraging Banvit's success. The government has increased the tax for companies importing meat, from 60% to 75%, curbing demand for meat imports but focusing attention on local producers, notably Banvit.

 

"We have been expecting this since the third quarter of last year, but it is one of the main points of good news for the company," he said.

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